How Global Cities Adapt to Global Change

Moving around (or trying to move around, at least) the city of São Paulo this week, spending time with the State Secretariat of Metropolitan Development, and visiting the port of Santos, it doesn't take too much insight to see that better transportation infrastructure is critical for the future global competitiveness of the entire São Paulo metropolitan region.

But I was struck at today's Global Cities Initiative (GCI) forum how many speakers and panelists, when confronted with the question of what one factor will matter most for the future of São Paulo , U.S. cities, and both countries, said the same thing: education.

The issue comes into stark relief in São Paulo thanks to the rapid de-industrialization the region has endured over the last couple of decades. By most estimates, services constitute 80 to 85 percent of greater São Paulo’s economy, up substantially from a couple decades ago when, as state governor Geraldo Alckmin explained, it was Latin America's industrial powerhouse. It still retains some of the nation's most advanced manufacturing sectors, but most of its low- and mid-skilled production jobs have fled to other regions of the country, or abroad to Asia.

One by-product of this industrial shift is an increasing demand for skilled workers to power existing firms, and to attract new investment. As in many U.S. cities, job quality is a chief concern in São Paulo as well, so that employment growth brings rising living standards.

Against that backdrop, it is amazing that only in the last decade or so has Brazil begun to provide universal primary and secondary education to its young people. It retains a world-class set of public universities, but even in the nation's most important regional economy, just 17 percent of adults hold a college degree. That's only about half the share as in the Chicago metropolis, for example. Given the ever-increasing pace of change in the global economy, especially in the traded sectors that shape the growth of cities, public leaders here recognize the need to dramatically accelerate educational achievement and attainment to maintain the city's global edge.

Government is responding. The average educational expenditure per student in Brazil rose 121 percent from 2000 to 2008, the largest increase among 30 countries. The government's Bolsa Familia program has helped as well, with payments conditional on school attendance. And as Eduardo Wurzmann of H&R Block Brazil observed, where 10 years ago education was not a major part of the public policy dialogue, one can pick up newspapers every day here and find significant coverage of the issue.

But as cities in the United States and around the world have learned, promoting adaptability and growth in city economies requires more than boosting education spending. Former Chicago mayor and Global Cities Initiative chairman Richard M. Daley, and mayors Antonio Villaraigosa of Los Angeles and Michael Coleman of Columbus, explained how their cities had stepped into the void of federal and state leadership to tackle tough issues related to education, job creation, and the environment. In an evolving federal system, Brazilian cities are still seeking the powers to act authoritatively like their American counterparts. Former Brazilian president Henrique Cardoso started this process of devolution in earnest in the late 1990s, handing over education and health responsibilities to cities, but explained how fiscal strictures continue to limit city flexibility.

Building city resilience is also not a one-electoral term project. Sustaining strategic investment over successive administrations, as discussed in Wednesday's GCI workshops, takes shared commitment across the public, private, and civic sectors. Mayors Daley and Coleman stressed how important partnership with business was to the success of their long-range plans. In that respect, it was heartening to hear Jorge Gerdau, president of Gerdau Group S.A. and the leading private sector spokesperson for Brazil's national competitiveness plan, list education as the number one factor critical to the future growth of the country, and especially cities like São Paulo.

And that made for a fitting coda to the first global GCI forum and our week in São Paulo. Cities exist, in the end, for the benefit of their people. So "going global" can only be a good thing for cities if it's a good thing for their residents. And those residents can only benefit from the opportunities that global trade and investment provide if they have the capacities--what Cardoso called the "human resources"--that ultimately promote economic adaptation and growth, and enhance local quality of life. That's a message that our two urban nations, and the metro areas that constitute them, can both embrace.